After a phenomenal run of late, MSG stock is dropping, with the quarterly earnings, as reported Wednesday, missing analysts projections by nearly one-third ... and down by two-thirds from the same period last year. Trish Regan of Bloomberg News asked former MSG president Bob Gutkowski what's the problem? He cited the Knicks on-court woes --their inability to make the playoffs -- and "the Barclays Effect."
Here's what he said about the Knicks effect on MSG's failure to hit estimates.
"The Knicks were a big hit, obviously. They had a lot of high expectations for the Knicks going into this season. They probably projected one or two rounds. That's a big loss of inventory. That's a big loss of food and beverage. That's big loss of merchandising. So when you put that together, that's probably a bit hit on the business. Also, you have to protect those dates. You can't book concerts until you've booked the playoffs and once that happens, you can't just put concerts in the building."
As for the effect of Barclays Center, now the most popular concert venue in the US, on Garden revenues, Gutkowski said it's hurting MSG.
"There's an effect. I think Barclays has done a good job. I think obviously they have their issues too because they have a basketball team, but they've taken away concert business -- more than I thought they would. So I've been somewhat impressed. And also, MSG Network is basically unwatchable once the seasons for the Knicks and Rangers end until they start it up again. Summer months are very soft for them. So I think advertising dollars are probably weak."
Still, Gutkowski who ran the MSG Network and MSG for nine years, called Knicks "a tremendous asset in the NBA and I think they need another Steve Ballmer to come in and buy the Knicks. if its ever put up for sale."
Meanwhile, Bruce Ratner was on CNBC promoting Barclays as the venue for the 2016 Democratic National Convention, saying the DNC delegation that visited Brooklyn last week --and came away with Nets uniform jerseys-- "were wooed and wowed" by the arena.